Nigerian cleantech startup Arnergy, backed by Bill Gates’ Breakthrough Energy Ventures, has raised $18 million in Series B funding to expand access to solar power in Nigeria.
The funding includes a $15 million extension on top of a previous $3 million B1 round, and comes at a time when demand for solar energy is surging due to rising fuel costs and unreliable grid power.
The round was led by CardinalStone Capital Advisers (CCA), with participation from Breakthrough Energy Ventures, British International Investment, Norfund, EDFI MC, and All On.
Fuel Subsidy Removal Sparks Solar Boo
Nigeria’s removal of a decades-old fuel subsidy in 2023 caused petrol prices to spike nearly 500%, making fuel generators prohibitively expensive. Arnergy’s solar systems are now positioned not just as a backup solution, but a cost-saving alternative for homes and businesses.
“We used to sell solar as a way to keep the lights on. Now we sell it as a way to save money,” said Femi Adeyemo, Arnergy’s founder and CEO.
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Lease-to-Own Model Gains Traction
Arnergy’s lease-to-own product, Z Lite, has become increasingly popular. While most of its 2023 revenue came from outright purchases, lease agreements now dominate sales, offering fixed monthly payments over 5–10 years.
With rising electricity tariffs and fuel prices, customers now find long-term solar leases more affordable. Arnergy claims monthly costs can drop by more than 50%, from ₦200,000 ($125) to ₦96,000 ($60).
The result? Arnergy tripled its lease customer base in 2024 and expects to grow it 4–5x by year-end.
Scaling Across Nigeria and Beyond
To date, Arnergy has deployed over 1,800 solar systems across 35 Nigerian states, delivering 9MWp of solar and 23MWh of battery storage.
With the new funding, Arnergy plans to install 12,000 more systems by 2029, expand its retail presence beyond Lagos, and launch energy-as-a-service (EaaS) offerings for multinational clients.
It is also exploring dollar-denominated B2B2C partnerships and Francophone Africa expansion to grow foreign revenue amid Nigeria’s currency challenges.
Local Manufacturing Debate
However, Arnergy’s growth faces potential headwinds. The Nigerian government recently proposed a ban on solar panel imports to boost local manufacturing—a move Adeyemo warns could cripple the industry prematurely.
“We support local manufacturing, but it’s not ready yet. We need infrastructure and policy stability before phasing out imports,” he said.
As the country grapples with energy insecurity, the company is doubling down on solar as both an economic lifeline and a sustainable alternative, aiming to redefine how Nigeria powers its future.
